Credit score and scorecard development

ABSTRACT

Share of Wallet (“SOW”) is a modeling approach that utilizes various data sources to provide outputs that describe a consumers spending capability, tradeline history including balance transfers, and balance information. These outputs can be appended to data profiles of customers and prospects and can be utilized to support decisions involving prospecting, new applicant evaluation, and customer management across the lifecycle. The outputs can be used as attributes to consider in developing a credit bureau scorecard.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation-in-part of U.S. patent applicationSer. No. 10/978,298, filed Oct. 29, 2004, which is incorporated byreference herein in its entirety.

BACKGROUND OF THE INVENTION

1. Field of the Invention

This disclosure generally relates to financial data processing, and inparticular it relates to credit scoring, customer profiling, consumerbehavior analysis and modeling.

2. Background Art

It is axiomatic that consumers will tend to spend more when they havegreater purchasing power. The capability to accurately estimate aconsumer's spend capacity could therefore allow a financial institution(such as a credit company, lender or any consumer services companies) tobetter target potential prospects and identify any opportunities toincrease consumer transaction volumes, without an undue increase in therisk of defaults. Attracting additional consumer spending in thismanner, in turn, would increase such financial institution's revenues,primarily in the form of an increase in transaction fees and interestpayments received. Consequently, a consumer model that can accuratelyestimate purchasing power is of paramount interest to many financialinstitutions and other consumer services companies.

A limited ability to estimate consumer spend behavior from point-in-timecredit data has previously been available. A financial institution can,for example, simply monitor the balances of its own customers' accounts.When a credit balance is lowered, the financial institution could thenassume that the corresponding consumer now has greater purchasing power.However, it is oftentimes difficult to confirm whether the loweredbalance is the result of a balance transfer to another account. Suchbalance transfers represent no increase in the consumer's capacity tospend, and so this simple model of consumer behavior has its flaws.

In order to achieve a complete picture of any consumer's purchasingability, one must examine in detail the fill range of a consumer'sfinancial accounts, including credit accounts, checking and savingsaccounts, investment portfolios, and the like. However, the vastmajority of consumers do not maintain all such accounts with the samefinancial institution and the access to detailed financial informationfrom other financial institutions is restricted by consumer privacylaws, disclosure policies and security concerns.

There is limited and incomplete consumer information from credit bureausand the like at the aggregate and individual consumer levels. Sincebalance transfers are nearly impossible to consistently identify fromthe face of such records, this information has not previously beenenough to obtain accurate estimates of a consumer's actual spendingability.

Accordingly, there is a need for a method and apparatus for modelingconsumer spending behavior which addresses certain problems of existingtechnologies.

BRIEF SUMMARY OF THE INVENTION

A method for modeling consumer behavior can be applied to both potentialand actual customers (who may be individual consumers or businesses) todetermine their spend over previous periods of time (sometimes referredto herein as the customer's size of wallet) from tradeline data sources.The share of wallet by tradeline or account type may also be determined.At the highest level, the size of wallet is represented by a consumer'sor business' total aggregate spending and the share of wallet representshow the customer uses different payment instruments.

In various embodiments, a method and apparatus for modeling consumerbehavior includes receiving individual and aggregated consumer data fora plurality of different consumers. The consumer data may include, forexample, time series tradeline data, consumer panel data, and internalcustomer data. One or more models of consumer spending patterns are thenderived based on the consumer data for one or more categories ofconsumer. Categories for such consumers may be based on spending levels,spending behavior, tradeline user and type of tradeline.

In various embodiments, a method and apparatus for estimating thespending levels of an individual consumer is next provided, which relieson the models of consumer behavior above. Size of wallet calculationsfor individual prospects and customers are derived from credit bureaudata sources to produce outputs using the models.

Balance transfers into credit accounts are identified based onindividual tradeline data according to various algorithms, and anyidentified balance transfer amount is excluded from the spendingcalculation for individual consumers. The identification of balancetransfers enables more accurate utilization of balance data to reflectconsumer spending.

When consumer spending levels are reliably identified in this manner,customers may be categorized to more effectively manage the customerrelationship and increase the profitability therefrom. For example, theoutputs from a share of wallet calculation can be used as attributes toconsider in developing a credit bureau scorecard.

BRIEF DESCRIPTION OF THE DRAWINGS/FIGURES

Further aspects of the present disclosure will be more readilyappreciated upon review of the detailed description of its variousembodiments, described below, when taken in conjunction with theaccompanying drawings, of which:

FIG. 1 is a block diagram of an exemplary financial data exchangenetwork over which the processes of the present disclosure may beperformed;

FIG. 2 is a flowchart of an exemplary consumer modeling processperformed by the financial server of FIG. 1;

FIG. 3 is a diagram of exemplary categories of consumers examined duringthe process of FIG. 2;

FIG. 4 is a diagram of exemplary subcategories of consumers modeledduring the process of FIG. 2;

FIG. 5 is a diagram of financial data used for model generation andvalidation according to the process of FIG. 2;

FIG. 6 is a flowchart of an exemplary process for estimating the spendability of a consumer, performed by the financial server of FIG. 1;

FIG. 7-10 are exemplary timelines showing the rolling time periods forwhich individual customer data is examined during the process of FIG. 6;and

FIG. 11-19 are tables showing exemplary results and outputs of theprocess of FIG. 6 against a sample consumer population.

FIG. 20 is a flowchart of a method for determining commoncharacteristics across a particular category of customers.

DETAILED DESCRIPTION OF THE INVENTION

While specific configurations and arrangements are discussed, it shouldbe understood that this is done for illustrative purposes only. A personskilled in the pertinent art will recognize that other configurationsand arrangements can be used without departing from the spirit and scopeof the present invention. It will be apparent to a person skilled in thepertinent art that this invention can also be employed in a variety ofother applications.

As used herein, the following terms shall have the following meanings. Atrade or tradeline refers to a credit or charge vehicle issued to anindividual customer by a credit grantor. Types of tradelines include,for example and without limitation, bank loans, credit card accounts,retail cards, personal lines of credit and car loans/leases. Forpurposes here, use of the term credit card shall be construed to includecharge cards except as specifically noted. Tradeline data describes thecustomer's account status and activity, including, for example, names ofcompanies where the customer has accounts, dates such accounts wereopened, credit limits, types of accounts, balances over a period of timeand summary payment histories. Tradeline data is generally available forthe vast majority of actual consumers. Tradeline data, however, does notinclude individual transaction data, which is largely unavailablebecause of consumer privacy protections. Tradeline data may be used todetermine both individual and aggregated consumer spending patterns, asdescribed herein.

Consumer panel data measures consumer spending patterns from informationthat is provided by, typically, millions of participating consumerpanelists. Such consumer panel data is available through variousconsumer research companies, such as comScore Networks, Inc. of Reston,Va. Consumer panel data may typically include individual consumerinformation such as credit risk scores, credit card application data,credit card purchase transaction data, credit card statement views,tradeline types, balances, credit limits, purchases, balance transfers,cash advances, payments made, finance charges, annual percentage ratesand fees charged. Such individual information from consumer panel data,however, is limited to those consumers who have participated in theconsumer panel, and so such detailed data may not be available for allconsumers.

Although the present invention is described as relating to individualconsumers, one of skill in the pertinent art(s) will recognize that itcan also apply to small businesses and organizations without departingfrom the spirit and scope of the present invention.

I. Consumer Panel Data and Model Development/Validation

Technology advances have made it possible to store, manipulate and modellarge amounts of time series data with minimal expenditure on equipment.As will now be described, a financial institution may leverage thesetechnological advances in conjunction with the types of consumer datapresently available in the marketplace to more readily estimate thespend capacity of potential and actual customers. A reliable capabilityto assess the size of a consumer's wallet is introduced in whichaggregate time series and raw tradeline data are used to model consumerbehavior and attributes, and identify categories of consumers based onaggregate behavior. The use of raw trade-line time series data, andmodeled consumer behavior attributes, including but not limited to,consumer panel data and internal consumer data, allows actual consumerspend behavior to be derived from point in time balance information.

In addition, the advent of consumer panel data provided through internetchannels provides continuous access to actual consumer spend informationfor model validation and refinement. Industry data, including consumerpanel information having consumer statement and individual transactiondata, may be used as inputs to the model and for subsequent verificationand validation of its accuracy. The model is developed and refined usingactual consumer information with the goals of improving the customerexperience and increasing billings growth by identifying and leveragingincreased consumer spend opportunities.

A credit provider or other financial institution may also make use ofinternal proprietary customer data retrieved from its stored internalfinancial records. Such internal data provides access to even moreactual customer spending information, and may be used in thedevelopment, refinement and validation of aggregated consumer spendingmodels, as well as verification of the models' applicability to existingindividual customers on an ongoing basis.

While there has long been market place interest in understanding spendto align offers with consumers and assign credit line size, the holisticapproach of using a size of wallet calculation across customers'lifecycles (that is, acquisitions through collections) has notpreviously been provided. The various data sources outlined aboveprovide the opportunity for unique model logic development anddeployment, and as described in more detail in the following, variouscategories of consumers may be readily identified from aggregate andindividual data. In certain embodiments of the processes disclosedherein, the models may be used to identify specific types of consumers,nominally labeled ‘transactors’ and ‘revolvers,’ based on aggregatespending behavior, and to then identify individual customers andprospects that fall into one of these categories. Consumers falling intothese categories may then be offered commensurate purchasing incentivesbased on the model's estimate of consumer spending ability.

Referring now to FIGS. 1-19, wherein similar components of the presentdisclosure are referenced in like manner, various embodiments of amethod and system for estimating the purchasing ability of consumerswill now be described in detail.

Turning now to FIG. 1, there is depicted an exemplary computer network100 over which the transmission of the various types of consumer data asdescribed herein may be accomplished, using any of a variety ofavailable computing components for processing such data in the mannersdescribed below. Such components may include an institution computer102, which may be a computer, workstation or server, such as thosecommonly manufactured by IBM, and operated by a financial institution orthe like. The institution computer 102, in turn, has appropriateinternal hardware, software, processing, memory and networkcommunication components that enables it to perform the functionsdescribed here, including storing both internally and externallyobtained individual or aggregate consumer data in appropriate memory andprocessing the same according to the processes described herein usingprogramming instructions provided in any of a variety of useful machinelanguages.

The institution computer 102 may in turn be in operative communicationwith any number of other internal or external computing devices,including for example components 104, 106, 108, and 110, which may becomputers or servers of similar or compatible functional configuration.These components 104-110 may gather and provide aggregated andindividual consumer data, as described herein, and transmit the same forprocessing and analysis by the institution computer 102. Such datatransmissions may occur for example over the Internet or by any otherknown communications infrastructure, such as a local area network, awide area network, a wireless network, a fiber-optic network, or anycombination or interconnection of the same. Such communications may alsobe transmitted in an encrypted or otherwise secure format, in any of awide variety of known manners.

Each of the components 104-110 may be operated by either common orindependent entities. In one exemplary embodiment, which is not to belimiting to the scope of the present disclosure, one or more suchcomponents 104-110 may be operated by a provider of aggregate andindividual consumer tradeline data, an example of which includesservices provided by Experian Information Solutions, Inc. of Costa Mesa,Calif. (“Experian”). Tradeline level data preferably includes up to 24months or more of balance history and credit attributes captured at thetradeline level, including information about accounts as reported byvarious credit grantors, which in turn may be used to derive a broadview of actual aggregated consumer behavioral spending patterns.

Alternatively, or in addition thereto, one or more of the components104-110 may likewise be operated by a provider of individual andaggregate consumer panel data, such as commonly provided by comScoreNetworks, Inc. of Reston, Va. (“comScore”). Consumer panel data providesmore detailed and specific consumer spending information regardingmillions of consumer panel participants, who provide actual spend datato collectors of such data in exchange for various inducements. The datacollected may include any one or more of credit risk scores, onlinecredit card application data, online credit card purchase transactiondata, online credit card statement views, credit trade type and creditissuer, credit issuer code, portfolio level statistics, credit bureaureports, demographic data, account balances, credit limits, purchases,balance transfers, cash advances, payment amounts, finance charges,annual percentage interest rates on accounts, and fees charged, all atan individual level for each of the participating panelists. In variousembodiments, this type of data is used for model development, refinementand verification. This type of data is further advantageous overtradeline level data alone for such purposes, since such detailedinformation is not provided at the tradeline level. While such detailedconsumer panel data can be used alone to generate a model, it may not bewholly accurate with respect to the remaining marketplace of consumersat large without further refinement. Consumer panel data may also beused to generate aggregate consumer data for model derivation anddevelopment.

Additionally, another source of inputs to the model may be internalspend and payment history of the institution's own customers. From suchinternal data, detailed information at the level of specificity as theconsumer panel data may be obtained and used for model development,refinement and validation, including the categorization of consumersbased on identified transactor and revolver behaviors.

Turning now to FIG. 2, there is depicted a flowchart of an exemplaryprocess 200 for modeling aggregate consumer behavior in accordance withthe present disclosure. The process 200 commences at step 202 whereinindividual and aggregate consumer data, including time-series tradelinedata, consumer panel data and internal customer financial data, isobtained from any of the data sources described previously as inputs forconsumer behavior models. In certain embodiments, the individual andaggregate consumer data may be provided in a variety of different dataformats or structures and consolidated to a single useful format orstructure for processing.

Next, at step 204, the individual and aggregate consumer data isanalyzed to determine consumer spending behavior patterns. One ofordinary skill in the art will readily appreciate that the models mayinclude formulas that mathematically describe the spending behavior ofconsumers. The particular formulas derived will therefore highly dependon the values resulting from customer data used for derivation, as willbe readily appreciated. However, by way of example only and based on thedata provided, consumer behavior may be modeled by first dividingconsumers into categories that may be based on account balance levels,demographic profiles, household income levels or any other desiredcategories. For each of these categories in turn, historical accountbalance and transaction information for each of the consumers may betracked over a previous period of time, such as one to two years.Algorithms may then be employed to determine formulaic descriptions ofthe distribution of aggregate consumer information over the course ofthat period of time for the population of consumers examined, using anyof a variety of known mathematical techniques. These formulas in turnmay be used to derive or generate one or more models (step 206) for eachof the categories of consumers using any of a variety of available trendanalysis algorithms. The models may yield the following types ofaggregated consumer information for each category: average balances,maximum balances, standard deviation of balances, percentage of balancesthat change by a threshold amount, and the like.

Finally, at step 208, the derived models may be validated andperiodically refined using internal customer data and consumer paneldata from sources such as comScore. In various embodiments, the modelmay be validated and refined over time based on additional aggregatedand individual consumer data as it is continuously received by aninstitution computer 102 over the network 100. Actual customertransaction level information and detailed consumer information paneldata may be calculated and used to compare actual consumer spend amountsfor individual consumers (defined for each month as the differencebetween the sum of debits to the account and any balance transfers intothe account) and the spend levels estimated for such consumers using theprocess 200 above. If a large error is demonstrated between actual andestimated amounts, the models and the formulas used may be manually orautomatically refined so that the error is reduced. This allows for aflexible model that has the capability to adapt to actual aggregatedspending behavior as it fluctuates over time.

As shown in the diagram 300 of FIG. 3, a population of consumers forwhich individual and/or aggregated data has been provided may be dividedfirst into two general categories for analysis, for example, those thatare current on their credit accounts (representing 1.72 millionconsumers in the exemplary data sample size of 1.78 million consumers)and those that are delinquent (representing 0.06 million of suchconsumers). In one embodiment, delinquent consumers may be discardedfrom the populations being modeled.

In further embodiments, the population of current consumers is thensubdivided into a plurality of further categories based on the amount ofbalance information available and the balance activity of such availabledata. In the example shown in the diagram 300, the amount of balanceinformation available is represented by string of ‘+’ ‘0’ and ‘?’characters. Each character represents one month of available data, withthe rightmost character representing the most current months and theleftmost character representing the earliest month for which data isavailable. In the example provided in FIG. 3, a string of six charactersis provided, representing the six most recent months of data for eachcategory. The ‘+’ character represents a month in which a credit accountbalance of the consumer has increased. The “0” character may representmonths where the account balance is zero. The “?” character representsmonths for which balance data is unavailable. Also provided the diagramis number of consumers fallen to each category and the percentage of theconsumer population they represent in that sample.

In further embodiments, only certain categories of consumers may beselected for modeling behavior. The selection may be based on thosecategories that demonstrate increased spend on their credit balancesover time. However, it should be readily appreciated that othercategories can be used. FIG. 3 shows the example of two categories ofselected consumers for modeling in bold. These groups show theavailability of at least the three most recent months of balance dataand that the balances increased in each of those months.

Turning now to FIG. 4, therein is depicted an exemplary diagram 400showing sub-categorization of the two categories of FIG. 3 in bold thatare selected for modeling. In the embodiment shown, the sub-categoriesmay include: consumers having a most recent credit balance less than$400; consumers having a most recent credit balance between $400 and$1600; consumers having a most recent credit balance between $1600 and$5000; consumers whose most recent credit balance is less than thebalance of, for example, three months ago; consumers whose maximumcredit balance increase over, for example, the last twelve monthsdivided by the second highest maximum balance increase over the sameperiod is less than 2; and consumers whose maximum credit balanceincrease over the last twelve months divided by the second highestmaximum balance increase is greater than 2. It should be readilyappreciated that other subcategories can be used. Each of thesesub-categories is defined by their last month balance level. The numberof consumers from the sample population (in millions) and the percentageof the population for each category are also shown in FIG. 4.

There may be a certain balance threshold established, wherein if aconsumer's account balance is too high, their behavior may not bemodeled, since such consumers are less likely to have sufficientspending ability. Alternatively, or in addition thereto, consumershaving balances above such threshold may be sub-categorized yet again,rather than completely discarded from the sample. In the example shownin FIG. 4, the threshold value may be $5000, and only those havingparticular historical balance activity may be selected, i.e. thoseconsumers whose present balance is less than their balance three monthsearlier, or whose maximum balance increase in the examined period meetscertain parameters. Other threshold values may also be used and may bedependent on the individual and aggregated consumer data provided.

As described in the foregoing, the models generated in the process 200may be derived, validated and refined using tradeline and consumer paneldata. An example of tradeline data 500 from Experian and consumer paneldata 502 from comScore are represented in FIG. 5. Each row of the data500, 502 represents the record of one consumer and thousands of suchrecords may be provided at a time. The statement 500 shows thepoint-in-time balance of consumers accounts for three successive months(Balance 1, Balance 2 and Balance 3). The data 502 shows each consumer'spurchase volume, last payment amount, previous balance amount andcurrent balance. Such information may be obtained, for example, by pagescraping the data (in any of a variety of known manners usingappropriate application programming interfaces) from an Internet website or network address at which the data 502 is displayed. Furthermore,the data 500 and 502 may be matched by consumer identity and combined byone of the data providers or another third party independent of thefinancial institution. Validation of the models using the combined data500 and 502 may then be performed, and such validation may beindependent of consumer identity.

Turning now to FIG. 6, therein is depicted an exemplary process 600 forestimating the size of an individual consumer's spending wallet. Uponcompletion of the modeling of the consumer categories above, the process600 commences with the selection of individual consumers or prospects tobe examined (step 602). An appropriate model derived during the process200 will then be applied to the presently available consumer tradelineinformation in the following manner to determine, based on the resultsof application of the derived models, an estimate of a consumer's sizeof wallet. Each consumer of interest may be selected based on theirfalling into one of the categories selected for modeling describedabove, or may be selected using any of a variety of criteria.

The process 600 continues to step 604 where, for a selected consumer, apaydown percentage over a previous period of time is estimated for eachof the consumer's credit accounts. In one embodiment, the paydownpercentage is estimated over the previous three-month period of timebased on available tradeline data, and may be calculated according tothe following formula:Pay-down %=(The sum of the last three months payments from theaccount)/(The sum of three month balances for the account based ontradeline data).The paydown percentage may be set to, for example, 2%, for any consumerexhibiting less than a 5% paydown percentage, and may be set to 100% ifgreater than 80%, as a simplified manner for estimating consumerspending behaviors on either end of the paydown percentage scale.

Consumers that exhibit less than a 50% paydown during this period may becategorized as revolvers, while consumers that exhibit a 50% paydown orgreater may be categorized as transactors. These categorizations may beused to initially determine what, if any, purchasing incentives may beavailable to the consumer, as described later below.

The process 600, then continues to step 606, where balance transfers fora previous period of time are identified from the available tradelinedata for the consumer. The identification of balance transfers areessential since, although tradeline data may reflect a higher balance ona credit account over time, such higher balance may simply be the resultof a transfer of a balance into the account, and are thus not indicativeof a true increase in the consumer's spending. It is difficult toconfirm balance transfers based on tradeline data since the informationavailable is not provided on a transaction level basis. In addition,there are typically lags or absences of reporting of such values ontradeline reports.

Nonetheless, marketplace analysis using confirmed consumer panel andinternal customer financial records has revealed reliable ways in whichbalance transfers into an account may be identified from imperfectindividual tradeline data alone. Three exemplary reliable methods foridentifying balance transfers from credit accounts, each which is basedin part on actual consumer data sampled, are as follows. It should bereadily apparent that these formulas in this form are not necessary forall embodiments of the present process and may vary based on theconsumer data used to derive them.

A first rule identifies a balance transfer for a given consumer's creditaccount as follows. The month having the largest balance increase in thetradeline data, and which satisfies the following conditions, may beidentified as a month in which a balance transfer has occurred:

-   -   The maximum balance increase is greater than twenty times the        second maximum balance increase for the remaining months of        available data;    -   The estimated pay-down percent calculated at step 306 above is        less than 40%; and    -   The largest balance increase is greater than $1000 based on the        available data.

A second rule identifies a balance transfer for a given consumer'scredit account in any month where the balance is above twelve times theprevious month's balance and the next month's balance differs by no morethan 20%.

A third rule identifies a balance transfer for a given consumer's creditaccount in any month where:

-   -   the current balance is greater than 1.5 times the previous        month's balance;    -   the current balance minus the previous month's balance is        greater than $4500; and    -   the estimated pay-down percent from step 306 above is less than        30%.

The process 600 then continues to step 608, where consumer spending oneach credit account is estimated over the next, for example, three monthperiod. In estimating consumer spend, any spending for a month in whicha balance transfer has been identified from individual tradeline dataabove is set to zero for purposes of estimating the size of theconsumer's spending wallet, reflecting the supposition that no realspending has occurred on that account. The estimated spend for each ofthe three previous months may then be calculated as follows:Estimated spend=(the current balance−the previous month's balance+(theprevious month's balance*the estimated pay-down % from step 604 above).The exact form of the formula selected may be based on the category inwhich the consumer is identified from the model applied, and the formulais then computed iteratively for each of the three months of the firstperiod of consumer spend.

Next, at step 610 of the process 600, the estimated spend is thenextended over, for example, the previous three quarterly or three-monthperiods, providing a most-recent year of estimated spend for theconsumer.

Finally, at step 612, this in turn may be used to generate a pluralityof final outputs for each consumer account (step 314). These may beprovided in an output file that may include a portion or all of thefollowing exemplary information, based on the calculations above andinformation available from individual tradeline data:

(i) size of previous twelve month spending wallet; (ii) size of spendingwallet for each of the last four quarters; (iii) total number ofrevolving cards, revolving balance, and average pay down percentage foreach; (iv) total number of transacting cards, and transacting balancesfor each; (v) the number of balance transfers and total estimated amountthereof; (vi) maximum revolving balance amounts and associated creditlimits; and (vii) maximum transacting balance and associated creditlimit.

After step 612, the process 600 ends with respect to the examinedconsumer. It should be readily appreciated that the process 600 may berepeated for any number of current customers or consumer prospects.

Referring now to FIGS. 7-10, therein is depicted illustrative diagrams700-1000 of how such estimated spending is calculated in a rollingmanner across each previous three month (quarterly) period. In FIG. 7,there is depicted a first three month period (i.e., the most recentprevious quarter) 702 on a timeline 710. As well, there is depicted afirst twelve-month period 704 on a timeline 708 representing the lasttwenty-one months of point-in-time account balance information availablefrom individual tradeline data for the consumer's account. Each month'sbalance for the account is designated as “B#.” B1-B12 represent actualaccount balance information available over the past twelve months forthe consumer. B13-B21 represent consumer balances over consecutive,preceding months.

In accordance with the diagram 700, spending in each of the three monthsof the first quarter 702 is calculated based on the balance valuesB1-B12, the category of the consumer based on consumer spending modelsgenerated in the process 200, and the formulas used in steps 604 and606.

Turning now to FIG. 8, there is shown a diagram 800 illustrating thebalance information used for estimating spending in a second previousquarter 802 using a second twelve-month period of balance information804. Spending in each of these three months of the second previousquarter 802 is based on known balance information B4-B15.

Turning now to FIG. 9, there is shown a diagram 900 illustrating thebalance information used for estimating spending in a third successivequarter 902 using a third twelve-month period of balance information904. Spending in each of these three months of the third previousquarter 902 is based on known balance information B7-B18.

Turning now to FIG. 10, there is shown a diagram 1000 illustrating thebalance information used for estimating spending in a fourth previousquarter 1002 using a fourth twelve-month period of balance information1004. Spending in each of these three months of the fourth previousquarter 1002 is based on balance information B10-B21.

It should be readily appreciated that as the rolling calculationsproceed, the consumer's category may change based on the outputs thatresult, and, therefore, different formula corresponding to the newcategory may be applied to the consumer for different periods of time.The rolling manner described above maximizes the known data used forestimating consumer spend in a previous twelve month period 1006.

Based on the final output generated for the customer, commensuratepurchasing incentives may be identified and provided to the consumer,for example, in anticipation of an increase in the consumer's purchasingability as projected by the output file. In such cases, consumers ofgood standing, who are categorized as transactors with a projectedincrease in purchasing ability, may be offered a lower financing rate onpurchases made during the period of expected increase in theirpurchasing ability, or may be offered a discount or rebate fortransactions with selected merchants during that time.

In another example, and in the case where a consumer is a revolver, suchconsumer with a projected increase in purchasing ability may be offereda lower annual percentage rate on balances maintained on their creditaccount.

Other like promotions and enhancements to consumers' experiences arewell known and may be used within the processes disclosed herein.

Various statistics for the accuracy of the processes 200 and 600 areprovided in FIGS. 11-18, for which a consumer sample was analyzed by theprocess 200 and validated using 24 months of historic actual spend data.The table 1100 of FIG. 11 shows the number of consumers having a balanceof $5000 or more for whom the estimated paydown percentage (calculatedin step 604 above) matched the actual paydown percentage (as determinedfrom internal transaction data and external consumer panel data).

The table 1200 of FIG. 12 shows the number of consumers having a balanceof $5000 or more who were expected to be transactors or revolvers, andwho actually turned out to be transactors and revolvers based on actualspend data. As can be seen, the number of expected revolvers who turnedout to be actual revolvers (80539) was many times greater than thenumber of expected revolvers who turned out to be transactors (1090).Likewise, the number of expected and actual transactors outnumbered bynearly four-to-one the number of expected transactors that turned out tobe revolvers.

The table 1300 of FIG. 13 shows the number of estimated versus actualinstances in the consumer sample of when there occurred a balancetransfer into an account. For instance, in the period sampled, therewere 148,326 instances where no balance transfers were identified instep 606 above, and for which a comparison of actual consumer datashowed there were in fact no balance transfers in. This compares to only9,534 instances where no balance transfers were identified in step 606,but there were in fact actual balance transfers.

The table 1400 of FIG. 14 shows the accuracy of estimated spending (insteps 608-612) versus actual spending for consumers with accountbalances (at the time this sample testing was performed) greater than$5000. As can be seen, the estimated spending at each spending levelmost closely matched the same actual spending level than for any otherspending level in nearly all instances.

The table 1500 of FIG. 15 shows the accuracy of estimated spending (insteps 608-612) versus actual spending for consumers having most recentaccount balances between $1600 and $5000. As can be readily seen, theestimated spending at each spending level most closely matched the sameactual spending level than for any other spending level in allinstances.

The table 1600 of FIG. 16 shows the accuracy of estimated spendingversus actual spending for all consumers in the sample. As can bereadily seen, the estimated spending at each spending level most closelymatched the same actual spending level than for any other actualspending level in all instances.

The table 1700 of FIG. 17 shows the rank order of estimated versusactual spending for all consumers in the sample. This table 1700 readilyshows that the number of consumers expected to be in the bottom 10% ofspending most closely matched the actual number of consumers in thatcategory, by 827,716 to 22,721. The table 1700 further shows that thenumber of consumers expected to be in the top 10% of spenders mostclosely matched the number of consumers who were actually in the top10%, by 71,773 to 22,721.

The table 1800 of FIG. 18 shows estimated versus actual annual spendingfor all consumers in the sample over the most recent year of availabledata. As can be readily seen, the expected number of consumers at eachspending level most closely matched the same actual spending level thanany other level in all instances.

Finally, the table 1900 of FIG. 19 shows the rank order of estimatedversus actual total annual spending for all the consumers over the mostrecent year of available data. Again, the number of expected consumersin each rank most closely matched the actual rank than any other rank.

Prospective customer populations used for modeling and/or laterevaluation may be provided from any of a plurality of availablemarketing groups, or may be culled from credit bureau data, targetedadvertising campaigns or the like. Testing and analysis may becontinuously performed to identify the optimal placement and requiredfrequency of such sources for using the size of spending walletcalculations. The processes described herein may also be used to developmodels for predicting a size of wallet for an individual consumer in thefuture.

Institutions adopting the processes disclosed herein may expect to morereadily and profitably identify opportunities for prospect and customerofferings, which in turn provides enhanced experiences across all partsof a customer's lifecycle. In the case of a credit provider, accurateidentification of spend opportunities allows for rapid provisioning ofcard member offerings to increase spend that, in turn, results inincreased transaction fees, interest charges and the like. The carefulselection of customers to receive such offerings reduces the incidenceof fraud that may occur in less disciplined card member incentiveprograms. This, in turn, reduces overall operating expenses forinstitutions.

II. Model Output

As mentioned above, the process described may also be used to developmodels for predicting a size of wallet for an individual consumer in thefuture. The capacity a consumer has for spending in a variety ofcategories is the share of wallet. The model used to determine share ofwallet for particular spend categories using the processes describedherein is the share of wallet (“SoW”) model. The SoW model providesestimated data and/or characteristics information that is moreindicative of consumer spending power than typical credit bureau data orscores. The SoW model may output, with sufficient accuracy, data that isdirectly related to the spend capacity of an individual consumer. One ofskill in the art will recognize that any one or combination of thefollowing data types, as well as other data types, may be output by theSoW model without altering the spirit and scope of the presentinvention.

The size of a consumer's twelve-month spending wallet is an exampleoutput of the SoW model. This type of data is typically output as anactual or rounded dollar amount. The size of a consumer's spendingwallet for each of several consecutive quarters, for example, the mostrecent four quarters, may also be output.

The SoW model output may include the total number of revolving cardsheld by a consumer, the consumer's revolving balance, and/or theconsumer's average pay-down percentage of the revolving cards. Themaximum revolving balance and associated credit limits can be determinedfor the consumer, as well as the size of the consumer's revolvingspending.

Similarly, the SoW model output may include the total number of aconsumer's transacting cards and/or the consumer's transacting balance.The SoW model may additionally output the maximum transacting balance,the associated credit limit, and/or the size of transactional spendingof the consumer.

These outputs, as well as any other outputs from the SoW model, may beappended to data profiles of a company's customers and prospects. Thisenhances the company's ability to make decisions involving prospecting,new applicant evaluation, and customer relationship management acrossthe customer lifecycle.

Additionally or alternatively, the output of the model can be calculatedto equal a SoW score, much like credit bureau data is used to calculatea credit rating. Credit bureau scores are developed from data availablein a consumer's file, such as the amount of lines of credit, paymentperformance, balance, and number of tradelines. This data is used tomodel the risk of a consumer over a period of time using statisticalregression analysis. Those data elements that are found to be indicativeof risk are weighted and combined to determine the credit score. Forexample, each data element may be given a score, with the final creditscore being the sum of the data element scores.

A SoW score, based on the SoW model, may provide a higher level ofpredictability regarding spend capacity and creditworthiness. The SoWscore can focus, for example, on total spend, plastic spend and/or aconsumer's spending trend. Using the processes described above, balancetransfers are factored out of a consumer's spend capacity. Further, whencorrelated with a risk score, the SoW score may provide more insightinto behavior characteristics of relatively low-risk consumers andrelatively high-risk consumers.

The SoW score may be structured in one of several ways. For instance,the score may be a numeric score that reflects a consumer's spend invarious ranges over a given time period, such as the last quarter oryear. As an example, a score of 5000 might indicate that a consumerspent between $5000 and $6000 in the given time period.

Alternatively or additionally, the score may include a range of numbersor a numeric indicator, such as an exponent, that indicates the trend ofa consumer's spend over a given time period. For example, a trend scoreof +4 may indicate that a consumer's spend has increased over theprevious 4 months, while a trend score of −4 may indicate that aconsumer's spend has decreased over the previous 4 months.

In addition to determining an overall SoW score, the SoW model outputsmay each be given individual scores and used as attributes forconsideration in credit score development by, for example, traditionalcredit bureaus. As discussed above, credit scores are traditionallybased on information in a customer's credit bureau file. Outputs of theSoW model, such as balance transfer information, spend capacity andtrend, and revolving balance information, could be more indicative ofrisk than some traditional data elements. Therefore, a company may usescored SoW outputs in addition to or in place of traditional dataelements when computing a final credit score. This information may becollected, analyzed, and/or summarized in a scorecard. This would beuseful to, for example and without limitation, credit bureaus, majorcredit grantors, and scoring companies, such as Fair Isaac Corporationof Minneapolis, Minn.

The SoW model outputs for individual consumers or small businesses canalso be used to develop various consumer models to assist in directmarketing campaigns, especially targeted direct marketing campaigns. Forexample, “best customer” or “preferred customer” models may be developedthat correlate characteristics from the SoW model outputs, such asplastic spend, with certain consumer groups. If positive correlationsare identified, marketing and customer relationship managementstrategies may be developed to achieve more effective results.

In an example embodiment, a company may identify a group of customers asits “best customers.” The company can process information about thosecustomers according to the SoW model. This may identify certain consumercharacteristics that are common to members of the best customer group.The company can then profile prospective customers using the SoW model,and selectively target those who have characteristics in common with thecompany's best consumer model.

FIG. 20 is a flowchart of a method 2000 for using model outputs toimprove customer profiling. In step 2002, customers are segmented intovarious categories. Such categories may include, for example and withoutlimitation, best customers, profitable customers, marginal customers,and other customers.

In step 2004, model outputs are created for samples of customers fromeach category. The customers used in step 2004 are those for whomdetailed information is known.

In step 2006, it is determined whether there is any correlation betweenparticular model outputs and the customer categories.

Alternatively, the SoW model can be used to separate existing customerson the basis of spend capacity. This allows separation into groups basedon spend capacity. A company can then continue with method 2000 foridentifying correlations, or the company may look to non-credit-relatedcharacteristics of the consumers in a category for correlations.

If a correlation is found, the correlated model output(s) is deemed tobe characteristic and/or predictive of the related category ofcustomers. This output can then be considered when a company looks forcustomers who fit its best customer model.

III. Applicable Market Segments/Industries

Outputs of the SoW model can be used in any business or market segmentthat extends credit or otherwise needs to evaluate the creditworthinessor spend capacity of a particular customer. These businesses will bereferred to herein as falling into one of three categories: financialservices companies, retail companies, and other companies.

The business cycle in each category may be divided into three phases:acquisition, retention, and disposal. The acquisition phase occurs whena business is attempting to gain new customers. This includes, forexample and without limitation, targeted marketing, determining whatproducts or services to offer a customer, deciding whether to lend to aparticular customer and what the line size or loan should be, anddeciding whether to buy a particular loan. The retention phase occursafter a customer is already associated with the business. In theretention phase, the business interests shift to managing the customerrelationship through, for example, consideration of risk, determinationof credit lines, cross-sell opportunities, increasing business from thatcustomer, and increasing the company's assets under management. Thedisposal phase is entered when a business wishes to dissociate itselffrom a customer or otherwise end the customer relationship. This canoccur, for example, through settlement offers, collections, and sale ofdefaulted or near-default loans.

A. Financial Services Companies

Financial services companies include, for example and withoutlimitation: banks and lenders, mutual fund companies, financiers ofleases and sales, life insurance companies, online brokerages, and loanbuyers.

Banks and lenders can utilize the SoW model in all phases of thebusiness cycle. One exemplary use is in relation to home equity loansand the rating given to a particular bond issue in the capital market.Although not specifically discussed herein, the SoW model would apply tohome equity lines of credit and automobile loans in a similar manner.

If the holder of a home equity loan, for example, borrows from thecapital market, the loan holder issues asset-backed securities (“ABS”),or bonds, which are backed by receivables. The loan holder is thus anABS issuer. The ABS issuer applies for an ABS rating, which is assignedbased on the credit quality of the underlying receivables. One of skillin the art will recognize that the ABS issuer may apply for the ABSrating through any application means without altering the spirit andscope of the present invention. In assigning a rating, the ratingagencies weigh a loan's probability of default by considering thelender's underwriting and portfolio management processes. Lendersgenerally secure higher ratings by credit enhancement. Examples ofcredit enhancement include over-collateralization, buying insurance(such as wrap insurance), and structuring ABS (through, for example,senior/subordinate bond structures, sequential pay vs. pari passu, etc.)to achieve higher ratings. Lenders and rating agencies take theprobability of default into consideration when determining theappropriate level of credit enhancement.

During the acquisition phase of a loan, lenders may use the SoW model toimprove their lending decisions. Before issuing the loan, lenders canevaluate a consumer's spend capacity for making payments on the loan.This leads to fewer bad loans and a reduced probability of default forloans in the lender's portfolio. A lower probability of default meansthat, for a given loan portfolio that has been originated using the SoWmodel, either a higher rating can be obtained with the same degree ofover-collateralization, or the degree of over-collateralization can bereduced for a given debt rating. Thus, using the SoW model at theacquisition stage of the loan reduces the lender's overall borrowingcost and loan loss reserves.

During the retention phase of a loan, the SoW model can be used to tracka customer's spend. Based on the SoW outputs, the lender can makevarious decisions regarding the customer relationship. For example, alender may use the SoW model to identify borrowers who are in financialdifficulty. The credit lines of those borrowers which have not fullybeen drawn down can then be reduced. Selectively revoking unused linesof credit may reduce the probability of default for loans in a givenportfolio and reduce the lender's borrowing costs. Selectively revokingunused lines of credit may also reduce the lender's risk by minimizingfurther exposure to a borrower that may already be in financialdistress.

During the disposal phase of a loan, the SoW model enables lenders tobetter predict the likelihood that a borrower will default. Once thelender has identified customers who are in danger of default, the lendermay select those likely to repay and extend settlement offers.Additionally, lenders can use the SoW model to identify which customersare unlikely to pay and those who are otherwise not worth extending asettlement offer.

The SoW model allows lenders to identify loans with risk of default,allowing lenders, prior to default, to begin anticipating a course ofaction to take if default occurs. Because freshly defaulted loans fetcha higher sale price than loans that have been non-performing for longertime periods, lenders may sell these loans earlier in the defaultperiod, thereby reducing the lender's costs.

The ability to predict and manage risk before default results in a lowerlikelihood of default for loans in the lender's portfolio. Further, evenin the event of a defaulted loan, the lender can detect the defaultearly and thereby recoup a higher percentage of the value of that loan.A lender using the SoW model can thus show to the rating agencies thatit uses a combination of tight underwriting criteria and robustpost-lending portfolio management processes. This enables the lender toincrease the ratings of the ABS that are backed by a given pool orportfolio of loans and/or reduce the level of over-collateralization orcredit enhancement required in order to obtain a particular rating.

Turning to mutual funds, the SoW model may be used to manage therelationship with customers who interact directly with the company.During the retention phase, if the mutual fund company concludes that acustomer's spending capacity has increased, the company can concludethat either or both of the customer's discretionary and disposableincome has increased. The company can then market additional funds tothe customer. The company can also cross-sell other services that thecustomer's increased spend capacity would support.

Financiers of leases or sales, such as automobile lease or salefinanciers, can benefit from SoW outputs in much the same way as a bankor lender, as discussed above. In typical product financing, however,the amount of the loan or lease is based on the value of the productbeing financed. Therefore, there is generally no credit limit that needsto be revisited during the course of the loan. For this reason, the SoWmodel is most useful to lease/sales finance companies during theacquisition and disposal phases of the business cycle.

Life insurance companies can primarily benefit from the SoW model duringthe acquisition and retention phases of the business cycle. During theacquisition phase, the SoW model allows insurance companies to identifythose people with adequate spend capacity for paying premiums. Thisallows the insurance company to selectively target its marketing effortsto those most likely to purchase life insurance. For example, theinsurance company could model consumer behavior in a similar manner asthe “best customer” model described above. During the retention phase,an insurance company can use the SoW model to determine which of itsexisting clients have increased their spend capacity and would have agreater capability to purchase additional life insurance. In this way,those existing customers could be targeted at a time during which theywould most likely be willing to purchase without overloading them withmaterials when they are not likely to purchase.

The SoW model is most relevant to brokerage and wealth managementcompanies during the retention phase of the business cycle. Due toconvenience factors, consumers typically trade through primarily onebrokerage house. The more incentives extended to a customer by acompany, the more likely the customer will use that company for themajority of its trades. A brokerage house may thus use the SoW model todetermine the capacity or trend of a particular customer's spend andthen use that data to cross-sell other products and/or as the basis foran incentive program. For example, based on the SoW outputs, aparticular customer may become eligible for additional services offeredby the brokerage house, such as financial planning, wealth management,and estate planning services.

Just as the SoW model can help loan holders determine that a particularloan is nearing default, loan buyers can use the model to evaluate thequality of a prospective purchase during the acquisition phase of thebusiness cycle. This assists the loan buyers in avoiding or reducing thesale prices of loans that are in likelihood of default.

B. Retail Companies

Aspects of the retail industry for which the SoW model would beadvantageous include, for example and without limitation: retail storeshaving private label cards, on-line retailers, and mail order companies.

There are two general types of credit and charge cards in themarketplace today: multipurpose cards and private label cards. A thirdtype of hybrid card is emerging. Multipurpose cards are cards that canbe used at multiple different merchants and service providers. Forexample, American Express, Visa, Mastercard, and Discover are consideredmultipurpose card issuers. Multipurpose cards are accepted by merchantsand other service providers in what is often referred to as an “opennetwork.” This essentially means that transactions are routed from apoint-of-sale (“POS”) through a network for authorization, transactionposting, and settlement. A variety of intermediaries play differentroles in the process. These include merchant processors, the brandnetworks, and issuer processors. This open network is often referred toas an interchange network. Multipurpose cards include a range ofdifferent card types, such as charge cards, revolving cards, and debitcards, which are linked to a consumer's demand deposit account (“DDA”)or checking account.

Private label cards are cards that can be used for the purchase of goodsand services from a single merchant or service provider. Historically,major department stores were the originators of this type of card.Private label cards are now offered by a wide range of retailers andother service providers. These cards are generally processed on a closednetwork, with transactions flowing between the merchant's POS and itsown backoffice or the processing center for a third-party processor.These transactions do not flow through an interchange network and arenot subject to interchange fees.

Recently, a type of hybrid card has evolved. This is a card that, whenused at a particular merchant, is that merchant's private label card,but when used elsewhere, becomes a multipurpose card. The particularmerchant's transactions are processed in the proprietary private labelnetwork. Transactions made with the card at all other merchants andservice providers are processed through an interchange network.

Private label card issuers, in addition to multipurpose card issuers andhybrid card issuers, can apply the SoW model in a similar way asdescribed above with respect to credit card companies. That is,knowledge of a consumer's spend capability, as well as knowledge of theother SoW outputs, could be used by card issuers to improve performanceand profitability across the entire business cycle.

Online retail and mail order companies can use the SoW model in both theacquisition and retention phases of the business cycle. During theacquisition phase, for example, the companies can base targetedmarketing strategies on SoW outputs. This could substantially reducecosts, especially in the mail order industry, where catalogs aretypically sent to a wide variety of individuals. During the retentionphase, companies can, for example, base cross-sell strategies or creditline extensions on SoW outputs.

C. Other Companies

Types of companies which also may make use of the SoW model include, forexample and without limitation: the gaming industry, charities anduniversities, communications providers, hospitals, and the travelindustry.

The gaming industry can use the SoW model in, for example, theacquisition and retention phases of the business cycle. Casinos oftenextend credit to their wealthiest and/or most active players, also knownas “high rollers.” The casinos can use the SoW model in the acquisitionphase to determine whether credit should be extended to an individual.Once credit has been extended, the casinos can use the SoW model toperiodically review the customer's spend capacity. If there is a changein the spend capacity, the casinos may alter the customer's credit lineto be more commensurate with the customer's spend capacity.

Charities and universities rely heavily on donations and gifts. The SoWmodel allows charities and universities to use their often limitedresources more effectively by timing their solicitations to coincidewith periods when donors have had an increase indisposable/discretionary income and are thus better able to makedonations. The SoW model also allows charities and universities toreview existing donors to determine whether they should be targeted foradditional support.

Communications providers, such as telephone service providers oftencontract into service plans with their customers. In addition toimproving their targeted marketing strategies, communications providerscan use the SoW outputs during the acquisition phase to determinewhether a potential customer is capable of paying for the service underthe contract.

The SoW model is most applicable to hospitals during the disposal phaseof the business cycle. Hospitals typically do not get to choose ormanage the relationship with their patients. Therefore, they are oftenin the position of trying to collect for their services from patientswith whom there was no prior customer relationship. There are two waysthat a hospital can collect its fees. The hospital may run thecollection in-house, or the hospital may turn over responsibility forthe collection to a collection agent. Although the collection agentoften takes fees for such a service, it can be to the hospital's benefitif the collection is time-consuming and/or difficult.

The SoW model can be used to predict which accounts are likely to paywith minimal persuasion, and which ones are not. The hospital can thenselect which accounts to collect in-house, and which accounts tooutsource to collection agencies. For those that are retained in-house,the hospital can further segment the accounts into those that requiresimple reminders and those requiring more attention. This allows thehospital to optimize the use of its in-house collections staff. Byselectively outsourcing collections, the hospital and other lendersreduces the contingency fees that it pays to collection agencies, andmaximizes the amount collected by the in-house collection team.

Members of the travel industry can make use of the SoW data in theacquisition and retention stages of the business cycle. For example, ahotelier typically has a brand of hotel that is associated with aparticular “star-level” or class of hotel. In order to capture variousmarket segments, hoteliers may be associated with several hotel brandsthat are of different classes. During the acquisition phase of thebusiness cycle, a hotelier may use the SoW method to target individualsthat have appropriate spend capacities for various classes of hotels.During the retention phase, the hotelier may use the SoW method todetermine, for example, when a particular individual's spend capacityincreases. Based on that determination, the hotelier can market a higherclass of hotel to the consumer in an attempt to convince the consumer toupgrade.

One of skill in the relevant art(s) will recognize that many of theabove-described SoW applications may be utilized by other industries andmarket segments without departing from the spirit and scope of thepresent invention. For example, the strategy of using SoW to model anindustry's “best customer” and targeting individuals sharingcharacteristics of that best customer can be applied to nearly allindustries.

SoW data can also be used across nearly all industries to improvecustomer loyalty by reducing the number of payment reminders sent toresponsible accounts. Responsible accounts are those who are most likelyto pay even without being contacted by a collector. The reduction inreminders may increase customer loyalty, because the customer will notfeel that the lender or service provider is unduly aggressive. Thelender's or service provider's collection costs are also reduced, andresources are freed to dedicate to accounts requiring more persuasion.

Additionally, the SoW model may be used in any company having a largecustomer service call center to identify specific types of customers.Transcripts are typically made for any call from a customer to a callcenter. These transcripts may be scanned for specific keywords ortopics, and combined with the SoW model to determine the consumer'scharacteristics. For example, a bank having a large customer servicecenter may scan service calls for discussions involving bankruptcy. Thebank could then use the SoW model with the indications from the callcenter transcripts to evaluate the customer.

Although the best methodologies of the disclosure have been particularlydescribed above, it is to be understood that such descriptions have beenprovided for purposes of illustration only, and that other variationsboth in form and in detail can be made by those skilled in the artwithout departing from the spirit and scope thereof, which is definedfirst and foremost by the appended claims.

1. A method of developing a credit score for a consumer, comprising:modeling, by a computer-based system for developing a credit score for aconsumer comprising a processor and a tangible, non-transitory memory,consumer spending patterns using individual consumer data and aggregateconsumer data for a plurality of consumers, including tradeline data,internal customer data, and consumer panel data; estimating, by thecomputer-based system, credit-related data of the individual consumerbased on tradeline data of the individual consumer, an amount ofidentified balance transfers of the individual consumer, and the modelof consumer spending patterns, wherein the credit-related data comprisesa spend amount associated with the individual consumer; offsetting, bythe computer-based system, the identified balance transfers from theestimated credit-related data; and determining a credit score for theindividual consumer by using the estimated credit-related data.
 2. Themethod of claim 1, wherein each of the estimated credit-related data andthe credit bureau data include a plurality of data types.
 3. The methodof claim 2, wherein each data type is assigned an individual score. 4.The method of claim 3, wherein said determining comprises: determiningwhich data types are most indicative of the individual consumer's risklevel; and assigning a credit score to the individual consumer based ona combination of scores of the data types most indicative of theindividual consumer's risk level.
 5. The method of claim 4, wherein saiddetermining comprises using statistical regression analysis to determinethe risk of the individual consumer over a given time.
 6. The method ofclaim 4, wherein said assigning comprises adding the scores of the datatypes most indicative of the individual consumer's risk level to assignthe credit score.
 7. The method of claim 3, wherein said determiningcomprises adding the individual scores of each data type to determinethe credit score for the consumer.
 8. The method of claim 2, wherein theplurality of data types includes at least one of: spend capacity of theconsumer, size of the consumer's spending wallet over a particular timeperiod, total number of the consumer's revolving cards, the consumer'srevolving balance, the consumer's average pay-down percentage forrevolving cards, total number of the consumer's transacting cards, theconsumer's transacting balance, a number of balance transfers transactedby the consumer, total amount of the consumer's balance transfers, theconsumer's maximum revolving balance, the consumer's maximum transactingbalance, the consumer's credit limit, size of the consumer's revolvingspending, and size of the consumer's transacting spending.
 9. The methodof claim 2, wherein at least one of the data types is analyzed in ascorecard.
 10. The method of claim 1, wherein the credit score reflectsthe consumer's total spending patterns.
 11. The method of claim 1,wherein the credit score reflects the consumer's plastic spendingpatterns.
 12. An apparatus for developing a credit score for a consumer,comprising: a processor; and a tangible, non-transitory memory incommunication with the process processor, wherein the memory stores aplurality of processing instructions for directing the processor to:model consumer spending patterns using individual consumer data andaggregate consumer data for a plurality of consumers, includingtradeline data, internal customer data, and consumer panel data;estimate credit-related data of the individual consumer based ontradeline data of the individual consumer, an amount of identifiedbalance transfers of the individual consumer, and the model of consumerspending patterns, wherein the credit-related data comprises a spendamount associated with the individual consumer; offsetting theidentified balance transfers from the estimated credit-related data; andcalculating a credit score for the consumer by using the estimatedcredit-related data.
 13. The apparatus of claim 12, wherein each of theestimated credit-related data and the credit bureau data include aplurality of data types.
 14. The apparatus of claim 13, wherein theprocessing instructions further direct the processor to assign anindividual score to each data type.
 15. The apparatus of claim 14,wherein the instructions to assign an individual score to each data typefurther direct the processor to: determine which data types are mostindicative of the consumer's risk level; and assign a credit score tothe consumer based on a combination of individual scores of the datatypes most indicative of the consumer's risk level.
 16. The apparatus ofclaim 13, wherein the processing instructions further direct theprocessor to output a scorecard including analysis of the plurality ofdata types.
 17. An article of manufacture including a computer readablemedium having instructions stored thereon that, in response to executionby a computing device, cause the computing device to perform operationscomprising: modeling consumer spending patterns using individualconsumer data, and aggregate consumer data for a plurality of consumers,including tradeline data, internal customer data, and consumer paneldata; estimating credit-related data of the individual consumer based ontradeline data of the individual consumer, an amount of identifiedbalance transfers of the individual consumer, and the model of consumerspending patterns, wherein the credit-related data comprises a spendamount associated with the individual consumer; offsetting theidentified balance transfers from the estimated credit-related data; andcalculating a credit score for the consumer by using the estimatedcredit-related data.
 18. The article of manufacture of claim 17, whereineach of the estimated credit-related data and the credit bureau datainclude a plurality of data types.
 19. The article of manufacture ofclaim 18, further comprising assigning an individual score to each datatype.
 20. The article of manufacture claim 19, further comprisingdetermining which data types are most indicative of the consumer's risklevel; and assigning a credit score to the consumer based on acombination of individual scores of the data types most indicative ofthe consumer's risk level.
 21. The article of manufacture claim 18,further comprising outputting a scorecard including analysis of theplurality of data types.